Inflation Risk is the Wrong Recession Lesson

This might be the most dangerous economic assertion circulating today: the high inflation from 2021-2023 was caused by government stimulus. The talking point on the right goes: the third COVID-era stimulus checks landed in March 2021, prices took off, case closed. Of course reality is more nuanced. And most serious estimates pin only a point or two of the inflation peak on the bill; the rest was supply chain chaos, a global chip shortage, and the Ukraine war. The pandemic caused the worst job loss on record — and the response produced the fastest labor-market recovery we've ever had, because policymakers went big. The danger is that they remember the inflation and forget the recovery. Chapters: 00:01:14 Announcements 00:03:24 Retcon: Q1 GDP Revised 00:04:50 Terms & Conditions: Output Gap, NAIRU, "The Long Depression" 00:11:49 Big Pilcrow: Is Recession Recovery Getting Blamed for Inflation? 00:42:14 Executive Orders: Parallel parking licenses, FIFA ticketing ban 00:45:52 Spiritual Sponsors: Small hardware stores, handwritten letter to OE Support Optimist Economy: https://optimisteconomy.com/donate Video-curious? Watch the Optimist Economy YouTube channel⁠⁠ https://www.youtube.com/@optimist_economy. We’re also on Instagram at ⁠⁠@optimist_economy https://www.instagram.com/optimist_economy or TikTok at ⁠⁠@optimist_economy https://www.tiktok.com/@optimist_economy. Or search for us on Facebook. Chat with Optimists on Substack. https://substack.com/chat/4604257?utm_source=pub-nav-bar Hats, tees and totes: https://merch.ambientinks.com/collections/optimisteconomy Reach us at: [email protected] mailto:[email protected]

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  At Radiolab, we love nothing more than nerding out about science. Neuroscience, chemistry.

• 0:06Speaker 01

  But, but, we do also like to get into other kinds of stories. Stories about policing, or-

• 0:12Speaker 00

  Politics.

• 0:12Speaker 01

  Country music.

• 0:13Speaker 00

  Hockey.

• 0:14Speaker 01

  Sex of bugs.

• 0:16Speaker 00

  Regardless of whether we're looking at science or not-science, we bring a rigorous curiosity to get you the answers.

• 0:23Speaker 01

  And hopefully, make you see the world anew.

• 0:24Speaker 00

  Radiolab, adventures on the edge of what we think we know.

• 0:28Speaker 01

  Wherever you get your podcasts.

• 0:30Speaker 02

  It was me that hit the mic, Sophie. It's always me that hits the mic. I don't know why you asked the chat, who hit the mic?

• 0:36Robin Rauzi?

  Yeah, and I sit on my hands when we record, you know that.

• 0:46Speaker 02

  Hello and welcome to Optimist Economy. I'm economist Catherine Ann Edwards.

• 0:49Robin Rauzi?

  I'm editor Robin Rousey.

• 0:51Speaker 02

  On this show, we believe the US economy can be better, and we talk about how to get there, one problem and solution at a time.

• 1:03Speaker 02

  Today on the show, we are going to talk about what I think might be the most harmful assertion made about the economy today.

• 1:10Robin Rauzi?

  What's that?

• 1:12Speaker 02

  I'm wondering, should we just like not tell people so they have to get through all of our fun [BLEEP] in the front? Like, you won't know, you'll have to keep listening.

• 1:20Speaker 02

  I assume they do listen, though. I don't, we don't need to-

• 1:22Robin Rauzi?

  It's suspense, yeah.

• 1:22Speaker 02

  Don't let the suspense kill you. It's about inflation. Did Biden cause inflation, basically?

• 1:28Robin Rauzi?

  Oh, okay. That's what we're gonna talk about? Okay.

• 1:31Speaker 02

  It's what I said we were gonna talk about, but that's the angle I'm taking. As you know, in journalism, angles are important, and my favorite one is head-on.

• 1:41Robin Rauzi?

  Okay, all right.

• 1:43Speaker 02

  Announcements.

• 1:43Robin Rauzi?

  Announcements, sure.

• 1:46Speaker 02

  I mean, I think, we gotta start with this.

• 1:49Robin Rauzi?

  Yeah.

• 1:49Speaker 02

  Some [BLEEP] heroes sent us cash.

• 1:55Robin Rauzi?

  I do love that. I do love that.

• 1:57Speaker 02

  Optimist Economy has a mailing address. It's a monitored mailbox. And I just got an alert that was like, you have been sent currency. And I was like, you sons of [BLEEP], you optimist. I love you. I was so touched. We've had two people send us cash. And one, one person wrote a very sweet note with it about how for the period of time that she was a stay at home mom and wasn't working, she had her like mom money, like her secret stash of mom money for small things. And so I got money from the secret stash of mom money, which I was like, this is the most proud I've ever been to have earned income.

• 2:37Robin Rauzi?

  That's great. That's fantastic. Speaking of money, I just wanted to thank the people who have donated to Optimist Economy through their DAF or their donor advised fund. I like to reach out to everyone who's made a substantial contribution to Optimist Economy. I have not found the way yet for me to get sort of an itemized list of who you are, but I know you're there and I want to thank you and I will find you later for a personal thank you. Also, and thank you to the people, because the show has been on the air for more than a year now, people are renewing their contributions from last year or renewing their membership on Substack. And thank you for that, too.

• 3:14Speaker 02

  We mean it as a compliment when we say, Robin will find you.

• 3:19Robin Rauzi?

  Right. Not in a stalkery way, in a like expressing gratitude way.

• 3:24Speaker 02

  It's a great way. Oh, it gives, it just like absolutely like lifts us both that people listen, that there's more than five of you, that there's dozens, thousands of you that listen, which is incredible, and that you support the show. It absolutely, you know, spurs me on.

• 3:39Robin Rauzi?

  And that we're only going slightly into debt to produce it.

• 3:43Speaker 02

  Yeah, but the show is almost out of debt, which when that happens, y'all, build these signs.

• 3:52Speaker 02

  Okay, retcon.

• 3:53Robin Rauzi?

  Ready for retcon?

• 3:55Speaker 02

  Quick retcon for me. I mentioned in the Make It Make Sense Economy episode that the first quarter's GDP estimate came out, but that it was probably going to be revised down. And wouldn't you know, it was revised down. It came out at around 2%. It was just revised down to 1.6%. It has one more revision to go. So, and this is just a small note that these revisions are the, like, crowning achievement of statistical agencies in transparency and accuracy as opposed to a mistake.

• 4:29Robin Rauzi?

  Mm-hmm, mm-hmm. That's our next t-shirt. I heart statistical agencies.

• 4:36Speaker 02

  Do you want to do that? Because, okay, okay. We were thinking about expanding our t-shirt line, and we're trying to think of what is the best expansion. Is it like, I'd rather be consuming leisure? I think that one's a popular one. Worker bot, not an economist.

• 4:50Robin Rauzi?

  Not an economist, just an optimist.

• 4:53Speaker 02

  Not an economist, just an optimist. But maybe we need to add I heart statistical agencies to the mix. And we can make the heart out of like a 3 and a less than equal sign.

• 5:06Robin Rauzi?

  You're my kind of nerd. Yeah, okay.

• 5:08Speaker 02

  Thank you. Okay. That was the only retcon I had.

• 5:12Robin Rauzi?

  Okay, I don't have any retcon.

• 5:14Speaker 02

  Wow, we must be, we must be really good at this.

• 5:20Robin Rauzi?

  Terms and conditions.

• 5:22Speaker 02

  Mine suck. You should do yours.

• 5:24Robin Rauzi?

  I think yours are actually a good point. I thought we, I thought we were talking about recessions today.

• 5:30Speaker 02

  We're talking about recessions. We are talking about recessions.

• 5:32Robin Rauzi?

  And so I was looking up something about recessions, and then I came across the term, "The Long Depression." We would think of it in the United States, I think, as the panic of 1873. But it was 65 months of recessionary economy and complicated international causes people disagree on, but a lot of things were happening, including no longer using silver as money in the US and Germany. There was a huge amount of railroad speculation that collapsed. And then agricultural oversupply that caused some major disruption in those markets.

• 6:11Robin Rauzi?

  And it basically ran from 1873 to 1879, though some people will say it went on much longer than that. 18,000 businesses went bankrupt, including 89 railroads, and unemployment peaked at eight and a quarter percent. It struck me as really interesting just because, first of all, I'd never heard of it. Second, because it seemed really like a significant thing not to have heard of. But also that it it just reminded me a little bit of the moment that we're in of great technological change, potential bubbles related to those technological changes. And I think the moment of fear that we're in that we could enter just this really long period of stagnation or decline economically.

• 6:52Speaker 02

  Hey, I meant to tell you the show is called Optimistic.

• 6:56Speaker 02

  Sorry, I don't know if I told you that. I meant to tell you that. I meant to tell you that literally weeks ago.

• 7:02Speaker 02

  Years ago now. Yeah, I mean, the 1873 comparison is not great because that, I mean, we we learn it as the panic of 1873. It it tanks grants second term as president. And it is associated with a speculative overbuilding of capital. Like, they're building railroads, they're building docks, like, they're building out infrastructure that doesn't have a return. The speculators go bust. It is good for the long run productivity of the economy. It lays a lot of groundwork, but it takes a really long time for that to come online. And that kind of sounds like AI.

• 7:35Robin Rauzi?

  Kind of does.

• 7:37Speaker 02

  You're not not wrong. No, it's it's a it's not limited to just 1873 and today, though. When we develop new technology, when we move infrastructure forward, we often build things before they become productive. In some ways, it's a really fascinating way to look at what's going on right now from the opposite of the jobs. Like, the story is jobs, we're going to lose our jobs, it's going to take our jobs. When I think from like a pure economist's standpoint, the bigger risk is that it's over.

• 8:06Robin Rauzi?

  Overbuilding?

• 8:07Speaker 02

  Yeah, it's overbuilding. We're building out for a technology whose productive capacity we're not prepared to fully integrate to our economy, and we have put too many eggs in one basket. That is the classic risk. I've never heard it called the long depression either.

• 8:21Robin Rauzi?

  Yeah, thank Wikipedia.

• 8:26Speaker 02

  Well, we are going to talk about recessions. I have two terms. They're related. The first one is called the output gap. So like a recession happens, the economy contracts, people spend less, businesses spend less, the economy gets smaller. The output gap is where we are in GDP and where we could be if we were being used to full capacity. So you could almost think of it as in your car, you have a 20 gallon tank, but you only have 18 gallons in the tank. The output gap is that two gallon difference of between what you could have and what you currently have. The other way to think about it, if it's intuitive at all, is the output gap is how big a stimulus package should be to get the economy back on track.

• 9:11Robin Rauzi?

  You only have an output gap if you're in a recession? Or could we have an output gap right now, even though we're not in a recession?

• 9:17Speaker 02

  It's associated with a drop in aggregate demand, which is almost always a recession. I mean, you might have one quarter drop in aggregate demand that like bounces back up, but typically you have an output gap when your economy is just not at capacity.

• 9:29Robin Rauzi?

  But it couldn't be like affected by like tariffs. I guess tariffs would affect demand and it's all the same.

• 9:34Speaker 02

  Yeah, because the output gap can be as you're coming out of a recovery too. Like the economy is coming, but like the output gap is still positive because we kind of assume the economy is always growing. And the economy, for the most part, is always growing. So it's not just that you went down, it's that you need to catch back up.

• 9:51Speaker 02

  The second term I have is called the NERU, which is sometimes referred to as the natural unemployment rate, but it's actually this horrible term called the non-accelerating inflation rate of unemployment.

• 10:04Robin Rauzi?

  It reminds me of a NERU jacket. I'm like, what is that?

• 10:09Speaker 02

  So how productive could the US economy be? Like if the US was firing on all cylinders, if everything was great, how big should the US economy be? That's asking like if we were taking full advantage of our productive capacity, what would it be? Well, unemployment wouldn't be 0%. Because if unemployment were 0%, that would mean that we would probably be entering a period of like rapidly spiking wages because there aren't enough workers, so few workers in fact, that employers are going to have to throw money at people to get wages to go up and that would lead to inflation. So the NERU is the idea that it's the right level of employment isn't zero. It's some low number that keeps prices in check. There are lots of people who would tell you that this thing is absolute

• 10:54Speaker 02

  However, you need to have a NERU in order to calculate the output gap.

• 10:59Robin Rauzi?

  Hmm. So what is the NERU? Does it vary? Or is it?

• 11:02Speaker 02

  Oh, right now, it's in the fours. This is the other thing that's kind of crazy. It changes almost every month. The Fed has a NERU estimate, the CBO has a NERU estimate, because it depends on where inflation is in the economy.

• 11:16Robin Rauzi?

  Oh, so it's not like a natural rate, like, like a permanent natural rate?

• 11:20Speaker 02

  People nickname it the natural rate of unemployment. And I'm like, y'all, this is the most unnatural unemployment rate that I can think of. But it's when something goes horrible and the economy enters recession, you have to come up with policy fast. What that policy should look like, that is a really high stakes game. Right? Because you're talking about a massive economy. You misstep, people are unemployed for forever. You misstep, you spike on inflation. And the reason why I wanted to bring these two things up is because March of 2021, Congress passed the American Rescue Plan Act, and several prominent economists took to the airwaves to say that if you look at the output gap based on the NERU that they suggested, the bill was too large and it would lead to inflation.

• 12:05Robin Rauzi?

  Okay, should we pause there and take a break before we come back to the big, before we just slide into the big pill crow?

• 12:11Speaker 02

  Yeah.

• 12:12Robin Rauzi?

  Okay.

• 12:17Robin Rauzi?

  And we're back for the big pill crow on recessions.

• 12:21Speaker 02

  On recessions.

• 12:21Robin Rauzi?

  And did the American Rescue Plan cause inflation?

• 12:24Speaker 02

  If you've seen Project Hail Mary, I'm Rocky, the little alien going recessions, bad, bad, bad, bad, bad. Have you seen it?

• 12:32Robin Rauzi?

  Yeah, I have. Are you gonna sing?

• 12:34Speaker 02

  Me as Rocky, recession, bad, bad, bad, bad, bad. Um, it's bad for me, planet. Um, recession, bad, bad, bad for me, planet.

• 12:43Robin Rauzi?

  From what you were saying before, it sounds like you're also worried about the response to recessions being bad. Is that it? Or this response particularly being maligned?

• 12:52Speaker 02

  The way that the US policymakers respond to recessions is really fascinating. And I think it's probably lost on most people that

• 13:01Speaker 02

  We kind of have the toolbox that we dip into, but we don't always take all the tools out of the box. Sometimes we just empty out the box and shake it and do everything. And the way that you feel a recession is really the way that policymakers try to respond to it. And we don't do the same thing every time. We're not always consistent and we often learn wrong lessons. Like, the generous recovery package passed in the early days of the Biden administration are the reason why we have inflation, which has become like just a de facto Republican talking point. And my kind of hook there is that that is by far the most dangerous assertion in the economy, that if you help people really well after a recession, you'll have inflation

• 13:47Speaker 02

  for five years. Like, it's not true, but it's subtle. Like, there's a real nuance to understanding what happened.

• 13:52Robin Rauzi?

  Let me talk me through this. So, what are you worried about? Where do you think our understanding of recessions has gone dangerously, maybe dangerously, but off course?

• 14:02Speaker 02

  I am worried that policymakers of the future will be so sensitive to inflation fears that they won't actually respond to recessions.

• 14:10Robin Rauzi?

  Got it.

• 14:12Speaker 02

  I think that is what I'm most afraid of, is that policymakers writ large internalize this really, really wrong lesson, because they're desperate for some one-sentence takeaway.

• 14:22Robin Rauzi?

  Okay, so what do you think the wrong lesson was? Where do you think it came from? I mean, you mentioned it, things being politicized, but how did it get, aside from the fact that things became political talking points, like, there was some reason that it's taken root?

• 14:34Speaker 02

  Okay, so let's do a quick tick-tock, going from February of 2020, let's all just like

• 14:41Robin Rauzi?

  Let's relive it.

• 14:41Speaker 02

  Hang out inside and give each other hugs, to basically the peak of inflation in June of 2022. So, what I will argue is that these are like, probably like the wildest 28 months in the US economy occurs over the pandemic. In March and April of 2020, over about a five-week period, the US economy sheds 22.5 million jobs, and Congress responds with a few pieces of legislation, but in particular, the Coronavirus Aid, Relief and Economic Security Act, aka CARES. And amongst all the things that it does, it includes a $1,200 stimulus check for each adult and $500 per child up to an income cap. At this point, in March and April, the US economy is at risk of falling into deflation,

• 15:24Speaker 02

  which only happens really during depressions.

• 15:27Robin Rauzi?

  Yeah.

• 15:27Speaker 02

  And inflation is around 0%. So that's March.

• 15:31Robin Rauzi?

  Right. Great times.

• 15:33Speaker 02

  Yeah. Fast forward to the end of the year, in December, and we are 10 million jobs short of where we were at the start of the year, and Congress passes the Coronavirus Response and Relief Supplement Act, which I always called Curse. So scares and curs. This is another stimulus check. This one is $600 per person. Inflation is at around, like, just over 1%. Prices are very, very low, and the first vaccines are coming out, going to the very elderly, but no one is vaccinated.

• 16:04Robin Rauzi?

  Right.

• 16:05Speaker 02

  So in January of 2021, when the December jobs report comes out and it shows that we've shed jobs, people panic. And at the same time, there's a special election in Georgia, and both Democratic candidates, who end up being victorious, promise that when they come to office, they will vote for another relief package and more stimulus checks. So even though a lot of economists said, "We probably don't need another stimulus check," it is a campaign promise from the Georgia Trail. So in March, the American Rescue Plan Act is passed and signed into law, and it includes $1,400 of relief per adult. Most of the American Rescue Plan Act is a lot of other stuff, like all the childcare support, a ton of money for schools, a ton of money for state and local governments, but it gets, like,

• 16:49Speaker 02

  this third round of stimulus check gets added on. And it wasn't well-targeted, it went to everybody, and it was pretty generous. So when ARPA, American Rescue Plan Act, passes, the US is still about 10 million jobs short from where we were before the pandemic started. Inflation is just at 1.5%, and, starting, basically, the month that the plan passed, inflation starts to tick up. So even though the economy is adding jobs at a rapid clip, prices start to rise at a rapid clip, almost as soon as the act goes into effect. Over the course of the following nine months, we add jobs, but also see higher prices in

• 17:30Speaker 02

  almost every month. And by the end of the year, we are only 3 million jobs short of where we were at the start of the pandemic, but inflation is almost at 7%.

• 17:41Robin Rauzi?

  Right.

• 17:42Speaker 02

  The preferred method of inflation that the Fed is using at the time is indicating that this is temporary.

• 17:48Robin Rauzi?

  Right.

• 17:49Speaker 02

  And it won't go up much more. It's called the trimmed mean. So they are holding off on broader interest rate policy. But by the end of the year,

• 17:58Robin Rauzi?

  Mm hmm.

• 17:58Speaker 02

  We've gotten two rounds of the vaccine. A lot of stuff has opened back up.

• 18:02Robin Rauzi?

  Yeah.

• 18:03Speaker 02

  Inflation is now at 7% and we are just 3 million jobs short.

• 18:08Robin Rauzi?

  Right.

• 18:10Speaker 02

  Okay, so, spring of 2022, Russia invades Ukraine.

• 18:15Robin Rauzi?

  Yeah.

• 18:15Speaker 02

  One of the world's largest oil producers invades one of the world's largest food producers. They produce a lot of wheat.

• 18:20Robin Rauzi?

  Yeah.

• 18:21Speaker 02

  And all hope of transitory inflation is lost. And now it looks like the Fed waited too long to respond. They raise interest rates in March of 2022. In June, all of the jobs lost in 2020 have been recovered. I mean, it's absolutely incredible how fast we did this. But it comes with this like dual prize of also being the peak of inflation at 8.9%. That is when inflation spikes.

• 18:45Robin Rauzi?

  Mm hmm.

• 18:46Speaker 02

  And that is when the labor market peaks. And since then, we have been coming back of both inflation is falling and the labor market has been getting weaker since June of 2022. So the assertion is

• 18:56Robin Rauzi?

  We overshot.

• 18:58Speaker 02

  We overshot. That the, that, like, you can just look at a graph. It was March of 21, that month, inflation went up and like bam bam bam, we, inflation took off. And so the reason why we had inflation coming out of the pandemic was because we overshot and helped people too much. And that is, so many people have absorbed that talking point.

• 19:16Robin Rauzi?

  And is it specifically the stimulus checks that went to households, not the school stuff and the infrastructure stuff and the

• 19:22Speaker 02

  No, it's really the stimulus checks that went to households that get,

• 19:24Robin Rauzi?

  Okay.

• 19:24Speaker 02

  I think most of the blame.

• 19:25Robin Rauzi?

  Right, right. Is this a correlation is not causation? I mean, we had two big stimulus checks in the months before that. So is it fair to say that this is what tipped us over into, or is that just about trying to blame the Biden administration versus take the blame in the first Trump administration? Yeah.

• 19:44Speaker 02

  So I think what makes this hard is that it has to, it's like a very, it is a very nuanced conversation.

• 19:52Robin Rauzi?

  Yeah.

• 19:53Speaker 02

  These stimulus checks have inflationary pressure. And the degree of inflationary pressure that a stimulus check would have would depend on the size of the output gap. Are you trying to put more into the economy than it needs? You've got the 20 gallon tank and you're adding four gallons, but really you already have 18, right? Like you're overfilling the tank.

• 20:14Robin Rauzi?

  Right.

• 20:15Speaker 02

  But at the same time, there are lots of other sources of inflationary pressure. And, I mean, we can talk about this in a second, but like every other country saw, industrialized countries saw prices go up. There was also massive supply chain problems. Like, it can have inflationary pressure, but not necessarily cause inflation. It can have inflationary pressure and not necessarily cause 8% inflation. It could be pressure, it could be a contributing factor, it could be a cause. Those are three essentially different manifestations of the same effect. And, I mean, that takes a lot of nuance to kind of internalize as a policymaker and as a person.

• 20:51Robin Rauzi?

  Yeah.

• 20:52Speaker 02

  So, people made the argument at the time, including Larry Summers, not one of my favorite people, wrote an editorial in Washington Post saying ARPA was too big. He didn't say it was going to cause inflationary pressure. He said outright, "This is going to cause inflation."

• 21:05Robin Rauzi?

  Mm-hmm.

• 21:06Speaker 02

  And, within like a year of it passing, economists all over the country at various research departments are trying to determine how much it adds to inflation. Because it definitely, it definitely is inflationary pressure. You're giving a lot of money to people. The Summers argument was, it was bigger than the output gap. Like, if you look at prices in the NARU, this was bigger than the output gap, so it was going to raise prices.

• 21:31Robin Rauzi?

  Can I wait, can I just ask a clarified question? You said because he looked at what prices were? Or where GDP was? I mean, the output gap is GDP, right?

• 21:41Speaker 02

  Yes, but its GDP is a function of the NARU. So, it does depend on prices at the time.

• 21:45Robin Rauzi?

  Okay, of course.

• 21:47Speaker 02

  Of course it does.

• 21:49Robin Rauzi?

  It's a function of the NARU.

• 21:50Speaker 02

  Yeah, it's my output gap via my specific, my preferred, it's my preferred NARU, actually, Robin. Um, yeah, I mean, the problem with the output gap is it's really hard to determine, especially, hang on, during recessions, when it's big.

• 22:03Robin Rauzi?

  Yeah.

• 22:03Speaker 02

  So, it's, so a lot of people were like, "Yeah, okay, Larry, like, we get it, like, it's big, but we have a two stimulus with very little consequences in terms of inflation." People are still hurting. I mean, this thing goes out before most of the vaccines do.

• 22:17Robin Rauzi?

  I'm sorry, the third stimulus check goes out before most of us got vaccines. Yeah.

• 22:21Speaker 02

  Yeah. The other argument is inflation increased in every country. All the countries that look like us had inflation go up and the exact path was slightly different, but like everybody had inflation.

• 22:35Robin Rauzi?

  So that would suggest that the causes were not necessarily this particular check. They were global supply chain shocks or something.

• 22:42Speaker 02

  Yeah, because also going on in the background of all this is a global chip shortage.

• 22:47Robin Rauzi?

  Mm hmm.

• 22:48Speaker 02

  And also going on in the background is massive supply chain issues because so many ports have been closed for the pandemic and then they reopen and they've got a lot of, like a huge backlog. And then the other part is that the supply chain didn't meet the shifting consumer demand that people were stuck in their homes and so they wanted a lot of goods. And what had happened over the course of the first, basically 12 to 15 months of the pandemic is that you had prices spike in particular goods that were having a supply chain issue, like chips are up.

• 23:19Robin Rauzi?

  Everybody wanted.

• 23:20Speaker 02

  Everybody wanted toilet paper.

• 23:21Robin Rauzi?

  Actually, I was thinking, everybody wanted like, do you remember Rogue weights?

• 23:24Speaker 02

  Oh, yeah.

• 23:25Robin Rauzi?

  Everybody at their home was building out their home gym and you could not get.

• 23:29Speaker 02

  Yes, and like lumber.

• 23:30Robin Rauzi?

  Get with good weights.

• 23:31Speaker 02

  Like, I need a [bleep] deck.

• 23:32Robin Rauzi?

  Yes.

• 23:33Speaker 02

  I need to score wood off of somebody. It was really like there were fires going on and like, it was like, this is gonna sound bad, the lumber fire, the chip fire, the used car fire, the weights fire, the like outdoor patio furniture fire. Like, you could see these prices and they would go up and they would be isolated. And so.

• 23:50Robin Rauzi?

  Yeah.

• 23:51Speaker 02

  It's not clear like.

• 23:52Robin Rauzi?

  But they didn't come back down. Except maybe like lumber, lumber came back down.

• 23:54Speaker 02

  Like, yeah, but it was like a contagion effect.

• 23:56Robin Rauzi?

  Yeah.

• 23:57Speaker 02

  That like, we had supply chain issues, we had so much evidence of this and that that had been a problem that had been happening over and over in the pandemic and it happened again. Wait, do you remember when the ship got stuck?

• 24:05Robin Rauzi?

  Yeah, the one in the Suez Canal. Yeah, I do. I do.

• 24:10Speaker 04

  A massive cargo ship spending a third day stuck in Egypt's Suez Canal, clogging one of the busiest shipping routes in the world. Rescue crews now say it might take weeks to set it free.

• 24:21Robin Rauzi?

  I just remember that the first thing I saw after the ship got unstuck was, put it back.

• 24:29Speaker 02

  Oh, man, the internet. It was such, those were such golden days of internet. But like, yeah, like, y'all ships don't get stuck in Suez Canal. Like, that's not normal. We had supply chain issues. So the, the kind of like, non-output gap Nairu take would be,

• 24:44Robin Rauzi?

  Yeah.

• 24:44Speaker 02

  there was just so much going on that also led to inflation. You know, the estimates of how much the Recovery Act increased inflation ranged anywhere from like, 0.5 points to 3 points.

• 24:58Robin Rauzi?

  That's how much it added to

• 25:00Speaker 02

  Inflation.

• 25:00Robin Rauzi?

  the inflation, which eventually reached, whatever, what'd you say, 8.9%?

• 25:03Speaker 02

  8.9.

• 25:04Robin Rauzi?

  Yeah.

• 25:05Speaker 02

  Yeah, so, so even the most aggressive estimate was that it didn't even account for half of the inflation that we saw. It's like, really hard to parse out, too, because, you know, the third round of stimulus checks went out to households with an income cap. But at the same time, those households did not hang on to it for that long. The people who saved the most were people who were comfortable.

• 25:25Robin Rauzi?

  Yeah.

• 25:25Speaker 02

  And the bottom 25 to 50%, they saved for a little while, but then like, that money was gone. So if you send a stimulus check out to someone in March who spends it in April, are they, can they really be held accountable for their spending is what caused inflation in June? I think that's why a lot of the Fed at the time thought it was going to be closer to a bump of like, well, we just gave people a lot of money. Evidence is that most of that money has been spent. So it's filtering its way through the economy. And instead, it just went right up.

• 25:54Robin Rauzi?

  So, yeah. So it could have been a little bit of lighter fluid on a fire, but the fire was already burning.

• 26:00Speaker 02

  Mm-hmm. And also not clear how much lighter fluid actually made it onto the fire.

• 26:05Robin Rauzi?

  Yeah. So why do you worry that the lesson that we take is really bad, that we don't want to help people in a recession, if there doesn't seem to be broad agreement that there was a problem with the first two stimulus checks?

• 26:17Speaker 02

  I think that we are discussing the nuanced take, like, the first two were necessary. This was a special circumstance. The third one might have overshot it. But like, at the end of the day, it was the fastest labor market recovery the US has ever had in a recession, following the worst job loss we've ever had. So like, we actually did okay. I think what people hear is, don't do what Biden did. And it's not, like, spread out of multiple pieces of legislation. And I, I think some listeners would probably say like, no, but they would help the economy if it was bad, and like, you shouldn't worry about this. Or, I don't have a ton of faith in Congress, but like, Congress always helps out in a recession. No, they don't.

• 26:55Robin Rauzi?

  Yeah.

• 26:55Speaker 02

  No, they didn't for the last one. And I think What makes me so worried is that the Great Recession was such, such an own [bleep] goal.

• 27:04Robin Rauzi?

  Yeah.

• 27:05Speaker 02

  It was such an own [bleep] goal. That thing was terrible. It did not have to be as bad as it was.

• 27:09Robin Rauzi?

  Yeah.

• 27:09Speaker 02

  If we were not so afraid to help people, which we were. And the result was catastrophic for communities, for people in foreclosure. Like, it was just-

• 27:18Robin Rauzi?

  For our politics.

• 27:20Speaker 02

  For pol- yeah, the way that politics devolved. I mean, it was just such a horribly managed recession. And that was the last one. I mean, I feel like the, the lesson was like, okay, don't do that. And we just keep like bouncing back and forth without really learning, like, you have to help.

• 27:37Robin Rauzi?

  Well, I certainly feel like people felt like there were bailouts out of the Great, during the Great Recession. Are you just saying that they weren't for households? That was like big bank-

• 27:46Speaker 02

  Yeah, oh my god, can I do a Great Recession TikTok?

• 27:49Robin Rauzi?

  Sure.

• 27:50Speaker 02

  Okay. Sophie's like, I really challenge you to make this short. So I will make this one as short as humanly possible, of 15 minutes. Okay.

• 27:58Robin Rauzi?

  Because it was a long recession.

• 27:59Speaker 02

  It was a really long recession. So, so...

• 28:05Speaker 02

  It's so hard for me to say without giving the full history of like over the counter derivatives, or the subprime mortgage lending. Okay. Let me just put it this way. Let me just put it this way. Let me just put it this way.

• 28:13Robin Rauzi?

  Okay.

• 28:14Speaker 02

  The US economy starts to slowly, slowly shed jobs at the start of 2008. And in the spring, Bear Stearns moves into the verge of collapse.

• 28:24Robin Rauzi?

  Right.

• 28:25Speaker 02

  Because too much of their portfolio is tied up in basically over the counter derivatives that are invested in mortgage-backed securities, in which the mortgage-backed securities are rated highly, but they are in fact contain numerous subprime loans. Those subprime loans were sold to low-income buyers on a floating interest rate. So the past three years, interest rate hikes that had been coming from the Fed were really starting to generate defaults in the subprime mortgage market. So you have these securities that are actually bad assets. Bear Stearns is the first to go. Happens in the spring, and the Fed arranges for JP Morgan Chase to buy Bear Stearns.

• 29:04Speaker 02

  So through the summer, it just keeps getting worse. Two places that you didn't want to have this happen to was Fannie Mae and Freddie Mac. They own half the mortgages in the US and they're about to collapse. And so as we come to September, Fannie Mae and Freddie Mac have to be bailed out by the federal government. So like the Housing Something Something Act, it's the first week of September, right after Labor Day. Within the next two weeks, Lehman Brothers fails. There's no buyer. AIG is rescued by the federal government. Washington Mutual is the largest bank failure on record and they need a government rescue. By the end of the month, John McCain and Barack Obama have suspended their presidential campaigns because they're both sitting senators and they come back to DC because something has to be done to protect the financial sector from completely collapsing.

• 29:48Speaker 02

  And they pass the Troubled Asset Relief Program, AKA TARP. Takes them a couple of times to do it, but it's $750 billion. It's shy of a trillion, but it gets added to a little bit. So the very first thing to come out of this recession is a massive bailout. Now, that bailout fund for TARP eventually ends up going to some of the auto manufacturers as well.

• 30:12Robin Rauzi?

  That's when they bail GM.

• 30:13Speaker 02

  Yeah, so by the time Obama becomes president, the backlash to the bank bailouts is already in full effect. And he goes to Congress to ask for recovery plan. He goes with the American Recovery and Reinvestment Act, ARA. And he makes it relatively small. So the output gap at the time is massive and he just asked for this like relatively measly bill. It passes, but the backlash to the bank bailouts, combined with the fact that they don't come up with a foreclosure bailout, results in this like resurgence of far right wing Tea Party Republicans that sweep the 2010 midterms and they end the Recovery Act spending before it's even done.

• 30:55Speaker 02

  And the entire time this is happening, the US is shedding jobs. It sheds jobs from February 2008 to February 2010. And every month, we lose more jobs, we lose more jobs, we lose more jobs, we lose more jobs. And then they get into the office. Not only did they end the recovery spending, but they then have several fights about like sequestration and federal, like there's a budget standoff, they shut down the federal governments, and the US economy does not recover the jobs lost in that recession until April of 2014.

• 31:28Robin Rauzi?

  Good lord.

• 31:29Speaker 02

  It is more than four years later.

• 31:31Robin Rauzi?

  Yeah.

• 31:32Speaker 02

  So.

• 31:33Robin Rauzi?

  That tracks.

• 31:34Speaker 02

  It's, yeah.

• 31:35Robin Rauzi?

  Tracks is my experience, yeah.

• 31:37Speaker 02

  If you live through it, you're like, that is actually about what I remember of a, like of a horrible half decade. And all of that was self-inflicted. Like, it was, why did they bail out the banks but not have a foreclosure bank to keep people in their homes and take over bad mortgages? Why did they not make the rescue plan larger and have more spending dedicated to state and local governments? I mean, if you're wondering why teachers are paid so little, it kind of goes back to the 2010s, and that this financial crisis crashed into state governments who run off of property taxes.

• 32:07Robin Rauzi?

  Mm-hmm.

• 32:08Speaker 02

  Everything gets devalued. They run off of sales tax and property tax. I mean, state government budgets are in freefall. They get so little money from the federal government that they turn to massive spending cuts. And there are states for whom teacher employment and salary has never really recovered from the Great Recession, because they had to bear so much of it. So like, when I say I'm worried, I'm really just afraid that we would let another Great Recession happen. And like, let popular politics and one-line phrases about like, "They bailed out them, but not me," you know, lead to incongruous policy where everybody is made worse off because you're trying to punish someone politically. That is what, I think that's my fear.

• 32:52Robin Rauzi?

  Mm-hmm.

• 32:53Speaker 02

  And I don't think that's my fear. That is my fear. I just, absolutely my fear.

• 32:59Robin Rauzi?

  I mean, what I remember about the Great Recession at the time was that it was, was it like bankruptcy, it happened slowly and then all at once? There was a year or more where I remember personally, granted, I was in the news industry, so I was, I don't know, was a little bit of a canary in the coalmine about economic stuff, especially when companies are affected, the first thing they stop spending on is advertising. And if you're in the media, you're pretty sensitive to it. But I just remember like thinking it's getting bad, it's getting bad and taking steps like to prepare, like make sure I had enough sort of savings, you know, emergency savings and getting rid of some discretionary spending. But when the collapse happened, it felt like it happened all at once.

• 33:40Robin Rauzi?

  But even then, it was so hard to puzzle out what the hell was going on with the mortgage-backed securities and the credit default swaps and the, it was like pulling like never-ending thread, trying to figure out what, what was causing all this. And they had, at least to me, the response was happening before we understood what had just gone down. Where with the pandemic, it was pretty, it seemed pretty clear what was going down.

• 34:04Speaker 02

  I mean, if you think the AI doomers are right, we have a very complex thread that we don't know, like this is another thing where it's like, okay, like you could be very distracted, trying to understand how AI works and what it does. Or you could just focus on what the economic pain could be and respond to that.

• 34:23Robin Rauzi?

  And your overarching concern is that every time we do this, every time we, we respond to a recession, are we fighting the last war? Or are we somehow we're doing it wrong? Or you know, actually, you don't think we did it wrong in the pandemic?

• 34:40Speaker 02

  Hmm. I think the pandemic was like a pretty, it was a close to best case scenario, considering just how much was wrong with the economy structurally. Like it is very hard to bring economy back to full strength when you're relying on very broken institutions. Like you're getting the IRS to send out stimulus checks when you've cut their funding for a decade. You're trying to get unemployed workers' health through a program that is five decades past due for reform. You, you're sending out money through PPP loans because you don't even know how many small, non-employer businesses you have, or how many people they employ. They erred on the side of generous.

• 35:16Robin Rauzi?

  But in part because we didn't have the, the sharp tools to really be more surgical.

• 35:19Speaker 02

  Because we didn't have the sharp tools. Like we, we could have had a lot sharper tools and really like really sewn that up. I, I think the things that I look back on of being quite helpful, the penalty-free forbearance of mortgages, where like you could just say, I can't pay, and you won't be penalized for not making mortgage payments. I mean, someone clever with money took advantage of that, but that kept people in their homes. Like, it kept people physically safe. And the penalty-free student loan forbearance, I mean, that that was a windfall for a lot of people that they didn't have to pay that money. And it was a way to increase the amount of cash you gave them because you were freeing up their budget. I don't think we ever really got the health stuff right. And I don't mean health stuff of like, when should we have been allowed to go outside?

• 36:02Speaker 02

  I mean, you would not expect people to lose health insurance.

• 36:06Robin Rauzi?

  During a pandemic?

• 36:07Speaker 02

  Yeah, I mean, like, we made it all the way through that pandemic, and we still don't have paid sick days.

• 36:11Robin Rauzi?

  Yeah.

• 36:12Speaker 02

  We made it all the way through that pandemic, and we are kicking people off of Medicaid.

• 36:17Speaker 02

  There could have been a moment where there was like a sweeping takeover of Medicaid or Medicare of like, I mean, there was kind of, we put a lot of people on Medicaid, but I think it could have been more sweeping and more long-lasting. I mean, that was the problem with a lot of the things we did in the pandemic. We had experiments with like very big liberal government that we just walked back.

• 36:38Speaker 02

  As a labor economist, you can't look at the fastest labor market recovery in history and have much to complain about of like, yo, I can nitpick, but like, we got people jobs quickly.

• 36:46Robin Rauzi?

  Right.

• 36:46Speaker 02

  And I know inflation sucks, but I'm telling you, a seven-year recession also sucks, especially when it's preceded with two full years of job loss and then another four and a half to recover. It means **** nightmare.

• 37:01Robin Rauzi?

  If we had, you've told me this before, if we had recovered from the pandemic recession at the same pace.

• 37:05Speaker 02

  It would have taken almost 20 years.

• 37:07Robin Rauzi?

  20 years?

• 37:08Speaker 02

  So you can look at the shape of recessions.

• 37:10Robin Rauzi?

  Like on a chart?

• 37:11Speaker 02

  It comes up when there's a recession, you'll see it again. But it's basically a chart that indexes, like, normalizes the start of the recession to month zero and then shows you what percentage of jobs were lost, right? This is how we make comparisons across an economy that was very differently sized. So like, what percentage of jobs lost in each month of the recession and how long it took to recover? This chart is somewhat interesting because everything that happens before the year 2000 is a really small, like it's under two years, you lose some jobs, not that many, you gain them back and they're like these little, the smiles.

• 37:41Robin Rauzi?

  Divots.

• 37:42Speaker 02

  These little divots. The 1990 recession took a while, 2001, we didn't lose that many jobs, but it took forever to get them back. Like for not having lost that many jobs in the recession, it was just one of the weakest business cycles we've ever had. Every other recession, the line stops and turns back up. The Great Recession, it's incredible. This line just keeps going down. Two years of job loss, we've never seen anything like it. In the 70s, we'd lose jobs for like four months, maybe 10. And then the jobs would jump right back up. I mean, we're shedding jobs for two years and then it is just this like painfully slow recovery. So if you just take the percentage of jobs added in every month and you put the shape

• 38:23Speaker 02

  of that line onto the nadir of job loss of the pandemic, I mean, you're looking at 20 plus years to recover. I mean, it's, it's lost on people. The, the Great Recession wiped out all of the job growth we had seen from 2000. Like it wiped a decade off of the map.

• 38:39Robin Rauzi?

  Wow.

• 38:41Speaker 02

  That was the jobs we lost. It took us another four years just to get those jobs back.

• 38:46Robin Rauzi?

  Yeah, I mean, we, we should just say, we are not in a recession as far as we know.

• 38:51Speaker 02

  No.

• 38:51Robin Rauzi?

  But this is on your mind. I'm kind of curious, like, I don't know, should we be, should we be preparing? I do feel a little bit like we're kind of a volunteer fire department. Every time one of these things happens, we'll scramble to find the buckets and the hoses. Maybe we could be less, less like, like that.

• 39:09Speaker 02

  Well, I think there's two things. I mean, one, yeah, it would be a lot easier to manage recessions if we didn't have such a economy the rest of the time. Like if we had a good unemployment system, if we had like very good healthcare, like all of these things would be easier if we didn't have in some points, the worst version of social programs.

• 39:30Robin Rauzi?

  Right. Cause you're just adding, you're just making every problem worse when a recession happens.

• 39:36Speaker 02

  Yeah, or maybe this is the way to put it. It's harder to respond to a recession when you are standing on unstable ground. And the economic and social policy structure that we have is unstable ground. Like, our unemployment program, you think after the number of jobs we lost this century, it would be good. It's not good. It really needs to be reformed. That makes it harder to nail a recession's response because now you've got to build an unemployment response on the fly. I think that that, in some ways, happens with every aspect of like, who gets money in a stimulus check? Who gets help through Medicaid? Who gets housing forbearance? Who gets student loan forbearance? Like, how do we do these things? All of them, we basically have to be messy because we don't have a good system. And then that messiness is what people respond to.

• 40:20Speaker 02

  But if we had a better way of identifying people in need, because we had really good social programs, like, we wouldn't miss so many people. And we wouldn't have so much, like, helping people who don't need help just because we weren't able to, like, whittle down our aim. I think that's what I worry about, is that this will keep happening. As long as these systems are not functioning on the level they should be, this will keep happening, that every recession will have some kind of mass casualty.

• 40:46Robin Rauzi?

  Yeah.

• 40:47Speaker 02

  I was so overwhelmed by the policy response to the pandemic because I was like, "Oh, we're [bleep] doing this." Like, I remember when someone told me on the phone, I was on this, like, policy call, and they're like, "Hey, we're talking to people who are experts in UI. What do you think about a $600 weekly benefit?" And I was like, "For who?" They're like, "For everybody." I'm like, "For everybody?" I remember, like, my jaw dropped. And I was like, "You're gonna be giving people more money on unemployment than they get from their [bleep] low-wage job." And they're like, "Yeah, well, their [bleep] low-wage job doesn't exist anymore. So we're gonna give everybody 600 bucks." And I remember thinking, like, I don't live in the same world that we lived in, you know, 15 years ago.

• 41:24Robin Rauzi?

  10 minutes ago.

• 41:24Speaker 02

  Like, this is just, like, I want people to hold on to that feeling that, like, inflation has hurt so many people, but in some ways, it's hurt the memory that we bounced back from the pandemic faster than we could have ever hoped for going into it because we were really bold with policy. That cost a lot, but I think almost putting inflation in the pandemic recovery account isn't fair.

• 41:48Robin Rauzi?

  Yeah.

• 41:49Speaker 02

  The takeaway is really to think about, like, this is not what the economy presents us, it is the choices we make in response. And if you are worried about AI... You need to leave all those [bleep] CEOs alone and go right to your member of Congress. Because like, that is where the difference is going to be made, is in what policymakers do. And like, truly, the next time you hear an AI CEO talk about like, the economic response, you just need to be like, whatever the sound Sophie made was to do the mic check. Like, really, like, just be like, okay, sounds good. And then like, you go right back to Congress. Because what will make the difference for you is not what a company does, but what your government does. Because that's who manages the economy.

• 42:29Robin Rauzi?

  Right. Yeah.

• 42:31Speaker 02

  That's optimistic. I think that's optimistic.

• 42:33Robin Rauzi?

  That's, I, well, depends on how much you trust Congress. But, let's, let's take a break, and we'll come back for executive orders and spiritual sponsors.

• 42:45Robin Rauzi?

  We're back, and we like to end our show with executive orders and spiritual sponsors, starting with our petty rules, if we ran the world, that we would implement. Catherine, what's your executive order?

• 42:57Speaker 02

  No, you go first. You go first.

• 42:59Robin Rauzi?

  Um, you know, I've been holding on to this one for a while, and I, I think that you should have to have a special driver's license to be allowed to parallel park. Have I said this before?

• 43:09Speaker 02

  I don't know, but I still agree with you.

• 43:12Robin Rauzi?

  I think, I'm not quite sure how this will work, but honest to God, if you don't know how to parallel park, you should not be allowed to on any major boulevard. Let's just say if it's got a parking meter, it's major enough that you shouldn't be allowed to parallel park on it. I cannot believe the stuff that people do.

• 43:27Speaker 02

  Oh man, I told you that there's a, there's a park down the street from my house, and people like, they don't park, they just stop in the lane. And they're like, I mean, they're solid like, two and a half feet from the curb, and they just stop and turn off their car. I'm like, you know, you're supposed to kind of like, hug the curb. You're not even really parallel parking, you're just taking over a lane.

• 43:44Robin Rauzi?

  Good lord.

• 43:45Speaker 02

  I thought someone was in trouble. I was like, oh my God, did your car die? No, this is just how you chose to park here. That's really interesting for you.

• 43:53Robin Rauzi?

  What's your executive order for the Edwards Republic?

• 43:57Speaker 02

  My executive order for the Edwards Republic is that FIFA's not allowed to sell tickets here anymore. Just not allowed. Like, it's not that they need to be regulated, I just, I think they've lost sale privileges. The government needs to take it over, and just start selling these tickets at a reasonable price, refunding people for the incredible amount of money that they sold. I- I got this horrible prompt from LinkedIn that was like, hey Catherine, what's the mood on the ground for World Cup in Houston? I was like, I think we're all pissed. I think it's like an absolute swindle and we're all pissed and this is terrible. And they're like, tell us about the mood at Fan Fest. I was like, Fan Fest is closing my favorite brewery.

• 44:39Robin Rauzi?

  Are they having games in Houston?

• 44:42Speaker 02

  Dallas and Houston both have games. Dallas has more, I think Dallas has the most games outside of New York.

• 44:49Robin Rauzi?

  Mm hmm.

• 44:50Speaker 02

  Cause it has a semifinal. Houston has group matches and then I want to say the first round of playoffs are here.

• 44:58Robin Rauzi?

  I got an email because I'm a, clearly I'm a sucker because I'm a season ticket holder for the now incredibly losing Angels City Football Club. God, my poor team. Uh, anyway, but they were still trying to sell tickets to, um, the matches here in Los Angeles. The cheapest seat available in the rafters of SoFi Stadium, $400. Everything else was $2,500 or $1,200.

• 45:28Speaker 02

  Yeah, it was just absolutely preposterous. So yeah, we just, if we could have like a takeover of FIFA ticketing, refund people, issue the tickets, they're not allowed to sell here. Oh God, it's so gross. It is so gross. I heard, there's an economist I follow on Blue Sky who basically came out with a series of charts of the resale market of games and he was like, you, this is all the evidence we need to know that FIFA is colluding with the resale market.

• 45:54Robin Rauzi?

  Hmm.

• 45:55Speaker 02

  Cause the way that tickets are becoming available in the resale market is not like chunks of two to three. I was like, we bought a pair of tickets and then we're selling them. It's like an entire section is going for sale. And he's like, so if you look at it, he's like, this is what collusion looks like. If we had an FTC with a spine, we'd be going after these people, but I'll just, for now, it'll just live in our land of executive orders.

• 46:18Robin Rauzi?

  Okay.

• 46:18Speaker 02

  Let's go on to the better thing.

• 46:19Robin Rauzi?

  Spiritual sponsors.

• 46:21Speaker 02

  Spiritual sponsors.

• 46:24Robin Rauzi?

  So my spiritual sponsor is a local independent hardware store. I don't know how these hardware stores manage to employ the number of semi-retired men that they do, but I love it that they do. And you walk in and you can't get halfway down an aisle before somebody's like, what are you looking for? What can I help you find? Unlike Lowe's or Home Depot or any of the other places you might go. I, I could just spend hours just wandering around a small local hardware store. Love it.

• 46:58Speaker 02

  Yeah. Oh, great sponsor. My spiritual sponsor for the week is that someone hand wrote us a letter and mailed it to us.

• 47:06Robin Rauzi?

  Oh, my God, you actually have it?

• 47:07Speaker 02

  Yeah, I have the letter. I mean, my favorite part, they clearly ripped it out of a spiral notebook, which is like even better. So the first time I read this letter, I sobbed, but I wanted to read a couple of highlights to you guys. And I think if I tell you I cried, that means I won't cry this time and I'm going to keep it together.

• 47:24Robin Rauzi?

  Good luck.

• 47:26Speaker 02

  I discovered Optimist Economy a month ago and have been fully enjoying every episode. I am not an economist myself, but I feel like I try to follow data with the same fervor as Catherine about the economy. And he goes on about his situation and ends with, all that to say, thank you for helping me believe in a possible future that works for more people. Your research, explanation, and down-to-earth humor have softened my heart and proves to me that someone is actually thinking instead of falsely hardlining ideas.

• 47:56Robin Rauzi?

  Nice.

• 47:57Speaker 02

  Okay. And then I have to read the last line because it's so good. Your podcast is helping me find that light of believing in people again, but mother [bleep] do we have to have a long way until our elected officials act in favor of the people rather than themselves best. I appreciate it. Honestly, I feel like he got the whole vibe of the show. Like, we're into it, we're optimistic, but like [bleep] we've got [inaudible]. I was like, thank you so much for this letter. Oh, my God.

• 48:28Robin Rauzi?

  Catherine had a scan of this letter that she shared with all of us because we're all in different places. So we all read it last week and, and, and loved it. It was just, it's terrific.

• 48:37Speaker 02

  So my spiritual sponsor is that guy who wrote us a letter who, I don't have a, I need to mail him back to ask him for permission to use his name in the full letter on air. So that's why I only read highlights because, you know, got to go through the mail.

• 48:50Robin Rauzi?

  Mm-hmm.

• 48:53Speaker 02

  Okay, Optimist Economy podcast is edited by Sophie Lalonde and video production for social media is by Andy Robinson. Thank you, Andy and Sophie.

• 49:01Robin Rauzi?

  Thank you, Andy and Sophie.

• 49:03Speaker 02

  Video clips from the show for you to share are available on TikTok, Instagram, Facebook, YouTube, or LinkedIn. You can buy t-shirts, hats, tote bags, and stickers on our website, optimist economy dot com. And of course, think carefully about what kind of t-shirts.

• 49:18Robin Rauzi?

  Baby onesie, bumper sticker.

• 49:20Speaker 02

  Baby onesie. If you want worker bought, I'd rather be consuming leisure, not an economist, still an optimist. Tell us your t-shirt ideas. I think we should expand the merch line if for no other reason than I want a new shirt.

• 49:32Robin Rauzi?

  You can email that to us at optimist dot economy at gmail dot com. If you're on Substack as a free or paid subscriber to Optimist Economy, you can join our group chat there. And if you have the means to contribute at whatever level is comfortable for you, we'll take your gifts at optimist economy dot com. Just click Donate there.

• 49:52Speaker 02

  Cash in a bag, though, baby. We'll take that, too.

• 49:54Robin Rauzi?

  Or cash. Or cash.